Daus: Why High RFP Insurance Limits Backfire According to “Curbing the Limousine Insurance Crisis,” which was prepared by Matthew W. Daus, Esq. at the University Transportation Research Center (UTRC) for the National Limousine Association (NLA) last year, corporate RFPs for ground transportation routinely demand $5 million to $10 million in combined auto liability and umbrella/excess coverage from limousine, sedan, and shuttle providers. He says this far exceeds “what state and municipal regulators require and is far beyond what claims data justifies,” imposing costs that are disconnected from actual risk.
The paper argues that these demands are counterproductive: they raise the cost of transportation services without making the corporation any safer, and they increase the corporation’s exposure to litigation rather than reducing it.
The American Transit Insurance Company (ATIC) estimates that 60% to 70% of the roughly 250,000 claims it processes annually are fraudulent, and in December 2024 filed a racketeering suit against more than 180 defendants – including law firms, medical clinics, and other entities – seeking to recover $450 million in fraudulent payouts.
The report states that “elevated policy limits make limousines a prime target for fraud rings seeking larger payouts. A staged accident involving a high-limit policyholder offers far greater potential for inflated medical claims, litigation, and settlements than a lower-limit vehicle.
The American Transit Insurance Company (ATIC) estimates that 60% to 70% of the roughly 250,000 claims it processes annually are fraudulent, and in December
2024 filed a racketeering suit against more than 180 defendants – including law firms, medical clinics, and other entities – seeking to recover $450 million in fraudulent payouts.
The 2025 NLA Industry Survey of operators found that 49% had no claims at all in the past three years, and 93% had no claims or lawsuits that exceeded their existing policy limits, Daus says. “In other words, the overwhelming majority of operators already carry more than enough coverage for the risk they actually generate. Demanding still more coverage does not respond to a real gap in protection – it responds to a perception of risk that the data does not support, while creating a bigger bullseye for the fraud and litigation dynamics described above.”
Source: Windels Marx
